Aetna Settles With Texas in Alleged Curbs on Physicians
Aetna U.S. Healthcare announced Tuesday it had settled a lawsuit by Texas, agreeing not to penalize doctors in its network who spend over budget for needed patient care.
In a wide-ranging suit, Texas had accused Aetna of using financial incentives to get doctors to limit medical care for patients--an issue that has embroiled the managed-care industry in controversy nationwide.
However, the settlement levied no penalties and contained no finding that the company, the largest managed-care company in Texas, had violated state law.
Under terms of the settlement, patients could also gain access to experimental treatments and prescription drugs not usually covered by Aetna, the nation’s largest health insurer.
The settlement is the first of its kind and is likely to be scrutinized in other states where government and private attorneys have brought similar suits against health maintenance organizations or are considering them.
Still pending in Texas are similar suits filed by the state attorney general against Pacificare, Humana and NYLcare.
A spokesman for California-based Pacificare said the company was ready to begin discussions and was awaiting formal communication from the Texas attorney general’s office.
“The agreement provides many much-needed improvements,” said Texas Atty. Gen. John Cornyn. “Especially important are the provisions ensuring that any financial incentives to doctors do not affect the quality of care received by patients and the provisions clarifying how Aetna makes coverage decisions.”
Many of the Texas settlement’s provisions mirror broader national legislation pending before Congress, which would potentially cover all Americans with private insurance.
The Texas settlement was welcomed by the American Medical Assn. and its Texas affiliate, which had worked hard on the lawsuit, particularly on the portions pertaining to Aetna’s contracts with physicians.
Dr. Thomas Reardon, president of the AMA, called the settlement a “step in the right direction” but warned that without national legislation, the country’s patchwork of HMO regulation would only become more inequitable.
The Texas agreement covers 960,000 patients and 13,000 doctors in Aetna’s HMOs in the state. However, Aetna said it would probably apply some of the provisions to its non-HMO members and that it would look to extend some elements to its plans nationwide.
Features that might become national include creating an ombudsman’s office within Aetna to serve all of the company’s patients, allowing standing referrals to specialists for patients with chronic conditions and disclosing more thoroughly which services are covered by the plan.
“This is the first agreement of its type done on so large a level that is formally legal,” said Dr. Arthur Leibowitz, Aetna’s chief medical officer. “We’ve said we would look at the implications for national policy changes, but it may not be possible in every state.”
Leibowitz noted that California, like several other states, has a different regulatory arrangement for HMOs and other managed-care companies than Texas.
“The agreement reinforces trends and directions that plans have been going in to respond to the needs of physicians and patients,” said Susan Pisano, a spokeswoman for the American Assn. of Health Plans, which represents more than 1,000 managed-care plans nationwide.
While many experts view the settlement’s reach as limited because many of the provisions were already in Texas law, they said that two aspects were important: several provisions should ease some of the financial stress that Aetna has put on smaller groups of physicians, and the commitment to enforce the agreement should ensure that consumers actually receive the protections they have been promised.
“You can give consumers all the rights you want, but if you don’t enforce them, they don’t mean anything,” said Larry Levitt, a senior health policy analyst at the Palo Alto-based Kaiser Family Foundation, a nonprofit research organization that concentrates on health-care issues.
